Dollar General on Tuesday lowered its full-year profit and sales forecast, hit by higher costs related to hurricanes in the third-quarter and higher freight costs, sending its shares down 6 percent before the bell.
“As a result of the third quarter hurricanes and other disasters, we will record greater-than-anticipated expenses in the second half of 2018,” Chief Financial Officer John Garratt said.
Dollar General, like several other retailers, also flagged higher transportation costs as a shortage of truck drivers, new driver regulations and higher fuel prices made moving freight much costlier.
The Goodlettsville, Tennessee-based company cut its full-year profit forecast to $5.85 to $6.05 per share from the prior forecast of $5.95 to $6.15 per share.
Dollar General also lowered its full-year sales growth forecast to the bottom-end of its prior forecast range of a 9 percent to 9.3 percent increase.
The disappointing forecast overshadowed better-than-expected quarterly same-store sales, bolstered by strong sales of fast moving consumable goods as well as its seasonal and home offerings.
Same-store sales at the retail chain rose 2.8 percent for the quarter ended Nov. 2, topping the 2.43 percent increase forecast by analysts, according to IBES data from Refinitiv.
Net income rose to $334.14 million, or $1.26 per share, from $252.53 million, or 93 cents per share, a year earlier.
Excluding hurricane related expense, the company earned $1.31 per share in the quarter, topping Wall Street estimate of $1.26 per share.
Net sales rose 8.7 percent to $6.42 billion, beating analysts estimate of $6.38 billion.
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